An expert committee framed by the Ministry of Electronics and Information Technology (MeitY) has recently released a report on Non-Personal Data (NPD) Governance Framework. It mandates sharing of NPD for the sovereign, core public interest and economic purposes.
The government intends to give a boost to startups/businesses via mandatory sharing of meta-data to develop innovative solutions, products and services and thus spurring innovation in the country. However, data dictates the dominant player in the market and is an intellectual property of the organisation – thus, cannot be shared with the competitors. Data is a property, and if one does not have any control over its property rights, the inclination to invest in it declines rapidly.
Thus, the intention behind the goal of the policy to enable a free and fair competitive market is applauded. However, there are concerns on three significant fronts concerning the intersection of data and antitrust issue which this article will talk about:
1) No definition of meta-data is provided
2) How will sharing of meta-data ensure the rights of data principal, is unclear and
3) There is no separate authority for dealing with antitrust issues, and non personal data authority is burdened with the complex issue.
Defining What Entails ‘Shared Data’
The policy states specifically that data businesses can make an access request to data custodians with respect to only meta-data, however, the word meta-data is void of any definition. Moreover, in relation to the economics of data, the report stipulates and distinguishes between voluntary, observed and inferred data.
Voluntary data is the data that is given by the user voluntarily while using a service, like a name, birthday, DOB etc. Observed data is obtained when the user uses a particular device or accesses a website like the nature of shopping, geo-location, or IP address etc. Inferred data is most competitive in nature, unlike the other two, and is obtained via data analytics – by combining the other two kinds of data, structuring them into a dataset and drawing inferences.
Even if we consider observed or inferred data to fall under the ambit of meta-data, sharing of it would impede innovation and disincentivize competitors to develop their own algorithmic business models (based on which prediction or filtering takes place). Thus, it is not the raw data that is lucrative rather the future inferences and predictions derived from the data that are both crucial and competitive.
Data Portability And Access To Essential Data
Apart from the definition of meta-data, its sharing mechanisms are unclear. While sharing data, the rights of data principals, as mentioned in the PDP Bill, 2019, should be taken care of. Primarily, the report should be cognizant of the right to data portability, while outlining the sharing protocol of meta-data. Data portability allows seamless movement of data across networks which is beneficial for the user. It is also useful for startups as portability aids access to the raw data.
However, ‘network effects’ (for example, in social networks, it arises when more users are connected to a particular service) create an impediment for the user to switch service. Markets with strong network effects tend to monopolise, because consumers gravitate towards a service or platform with more users, and thereby the market tip towards the dominant player. Thus, if enough users give consent to transfer their raw data, or there is a data access request under the ‘essential facilities doctrine’ (mandatory for the data business to supply meta-data), the right to data portability would come into play and promote entry and competition.
Freedom To Choose And Monopoly
In an era of automated systems, the user has limited knowledge about what kind of data is being collected, merged and how it is processed, stored and deleted – ‘data masking’ – which diminishes making an informed choice. The concept of ‘refusal to supply’ data can lead to the elimination of effective competition on the downstream market. It can also harm a consumer with respect to making an autonomous choice while buying products or services, as non-sharing of data would lead to a monopoly.
As Friedrich Hayek pointed out:
“Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his absolute mercy”
Autonomy is often conceptualized in the form of personhood, self-determination, or free will, being used interchangeably. In various jurisdictions, like India, the Supreme court has recognized that personal autonomy includes both the negative right of non-interference by others and the positive right of decisional independence.
Competition authorities and not NPDA, should thereby adopt a consumeristic approach to the balance bargaining power of consumers and rectify issues of information asymmetry. Further, defining meta-data and the obligation of the right to data portability would disable the network effects of a dominant player and allow a consumer an opportunity to choose from different products and services.
This approach would also be in consonance with Article 29 of the Data Protection Working Party Opinion which notes that in the age of data aggregation and large scale data collection, information sovereignty is at risk and thereby privacy and autonomy of an individual should be safeguarded. It is a significant concern which should explicitly vest under the purview of the Non-Protection Data Authority, which is the primary body for dealing issues with privacy and data protection, and not antitrust.
Due to a rapid shift in technologies, the distinction between personal and non-personal data is becoming blurry. Thus, the present report is an appropriate developmental step by the Indian government. However, a deep dive needs to take place into the intersection of law and economics and what role non-personal data can play to boost free, fair, and open market. The report proves to be myopic in a sense, it considers dominance to be anti-competitive rather than abuse of dominance.
The contours of Market Tipping as a consequence of network effects should be taken into consideration while formulating mandatory data sharing mechanisms. Also, if the report allows the sharing of meta-data for the sovereign, national security, and economic purposes, then to the least, it can define the same. Further, the sheer prospect of portability of data would incapacitate the dominant player and would give rise to more competition and thereby higher quality services to consumers.
[The article was co-authored by Kazim Rizvi and Harsh Bajpai, doctoral researcher and part-time tutor at Durham University]